Wholesale prices flat on back of weakening yen

Wholesale prices were unchanged in April from a year earlier following 12 straight months of decline, the Bank of Japan said Tuesday.

Prices of steel as well as information and communications equipment continued to drop, but increases for materials such as lumber as well as utility bills on the back of the yen’s weakening supported the downside of the overall wholesale prices.

The index of corporate goods prices stood at 101.4 against the 2010 base of 100, the central bank said in a preliminary report.

By product, iron and steel dropped 5.0 percent from a year earlier, and information and communications equipment fell 6.2 percent amid fierce price competition. Meanwhile, prices of lumber and wood products rose 6.0 percent and those of electricity, gas and water increased 6.4 percent. Nonferrous metals also gained 4.4 percent.

On a month-on-month basis, the index was up 0.3 percent from March for the fifth consecutive month of increase, the central bank said.

“Prices of some materials, which are susceptible to currency moves, will likely continue to rise on the back of the yen’s depreciation,” a BOJ official said.

The official added that there have been concerns among Japanese companies over the outlook for overseas economies such as China, which may weigh on the index, but that there have also been signs of recovery in the U.S. economy and wariness will likely wane down the road.

In terms of the yen, Japanese export prices increased 8.9 percent from a year earlier, while import prices rose 9.5 percent on the yen’s continued depreciation against other major currencies.